In the case of the private equity crowd it is nothing more than leveraged misappropriation.
From Spear's Magazine:
Coronavirus fallout has prompted single-family offices to reassess alternative investments such as private equity, according to a major new report from the private bank
In March of this year, 73 per cent of single-family offices expected private investments to outperform the public markets but, by May, that figure had fallen to just 51 per cent.....MUCH MORE
The figures come from a detailed UBS survey of principles and executives from 120 family offices with an average total wealth of $1.6bn, which is released today.
‘The average assets under management of the clients we surveyed is significantly larger than that of any other comparable study in the market,’ said Josef Stadler, head of the global family office division at UBS. ‘We can therefore say with confidence that our findings offer a unique window into the actions of the world’s biggest family offices.’
At the height of the crisis, the ‘immediate reaction of family offices’ was to view private equity with ‘greater caution’, the report notes. Just 28 per cent said in May that they expected to increase ‘direct private equity’ compared to 49 per cent ahead of the crisis.
However, the private markets continue to be important to family offices. Some 77 per cent remain invested in the asset class and more than two thirds (69 per cent) still view private equity as a key driver of returns.
‘For many business families, private equity is in the blood,’ noted the UBS report. ‘A third (34 per cent) of family offices describe private equity as a passion for the owner.’ What’s more, 35 per cent of family office principals and executives surveyed in May, during ‘the turbulent environment after the onset of Covid-19’, said that greater degree of control offered by private equity was ‘a plus’, compared to just 27 per cent of those surveyed in March....
